English Course: Business in Germany - Chapter 1

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Questions and Answers

What is the primary focus of the course, "Doing Business in Germany"?

  • The history of German business practices
  • International trade relations with Germany
  • The legal and taxation system of Germany (correct)
  • The automotive industry in Germany

What is the course level and the number of ECTS credits assigned to it?

  • Bachelor's level, 2.5 ECTS (correct)
  • Bachelor's level, 5 ECTS
  • Master's level, 2.5 ECTS
  • Master's level, 5 ECTS

During which period does the course take place?

  • Autumn 2024
  • Winter 2024/2025 (correct)
  • Summer 2024
  • Spring 2025

Which of the following is NOT listed as a contributing factor to Germany's commercial appeal?

<p>Low labor costs (B)</p> Signup and view all the answers

What is the primary assessment method for the course?

<p>A final exam lasting 60 minutes (A)</p> Signup and view all the answers

What is the estimated workload for this course?

<p>75 hours (A)</p> Signup and view all the answers

What is the scheduled time and day of the course information session?

<p>Tuesday, 14:15 – 15:45 (D)</p> Signup and view all the answers

Which of the following conditions must be met for a student to be admitted to a module exam?

<p>The student must have passed all prerequisite modules for the module. (B)</p> Signup and view all the answers

Which of the following is NOT mentioned as a key industry in Germany?

<p>Aerospace (E)</p> Signup and view all the answers

What is the purpose of the module exam, according to the text?

<p>To evaluate the student's ability to apply the knowledge and skills gained during the module. (C)</p> Signup and view all the answers

What is the deadline for withdrawing from a module exam?

<p>The third working day before the exam date. (D)</p> Signup and view all the answers

What is the impact of a passing grade on a module exam?

<p>It contributes to the student's overall grade for the Bachelor's degree. (A)</p> Signup and view all the answers

What is NOT a reason for denying a student admission to a module exam?

<p>The student is unable to demonstrate understanding of the module's content. (A)</p> Signup and view all the answers

What is the primary function of the supervisory board in a German stock corporation (AG)?

<p>To oversee the activities of the management board (B)</p> Signup and view all the answers

In a German stock corporation (AG), who is responsible for appointing members of the supervisory board?

<p>The general meeting (A)</p> Signup and view all the answers

What type of legal entity is the Societas Europaea (SE)?

<p>An international legal entity governed by European community law (C)</p> Signup and view all the answers

What is the main advantage of establishing a Societas Europaea (SE)?

<p>The ability to operate in the European Economic Area under a single set of rules (D)</p> Signup and view all the answers

Which of the following is NOT a responsibility of the supervisory board in a German stock corporation (AG)?

<p>Managing the company's day-to-day operations (D)</p> Signup and view all the answers

What is a key difference between the management board and the supervisory board in a German stock corporation (AG)?

<p>The management board is responsible for day-to-day operations, while the supervisory board oversees them. (A)</p> Signup and view all the answers

What is the role of the chairman of the management board (Vorstandsvorsitzender) in a German stock corporation (AG)?

<p>To be responsible for specific company resorts and provide overall leadership (A)</p> Signup and view all the answers

Which of the following entities is involved in the decision-making process regarding structural changes in a German stock corporation (AG)?

<p>The general meeting (B)</p> Signup and view all the answers

What is the primary source of funding for a sole proprietorship?

<p>Equity financing, where the owner invests their own money (C)</p> Signup and view all the answers

What does it mean to be personally liable for all the firm's obligations?

<p>The owner is responsible for paying all the firm's debts, even if it means using personal assets (C)</p> Signup and view all the answers

In the United States, how do sole proprietorships compare to other business structures in terms of sales?

<p>Sole proprietorships account for a small percentage of sales, but they are the most common company type (A)</p> Signup and view all the answers

Which of these is NOT an advantage of a sole proprietorship?

<p>It is subject to a lot of regulations (B)</p> Signup and view all the answers

What is the distinction between debt and equity financing in the context of business?

<p>Debt financing involves borrowing money, while equity financing involves selling ownership stakes (A)</p> Signup and view all the answers

What is the minimum share capital required for a limited liability company in Germany?

<p>25,000 euros (C)</p> Signup and view all the answers

Which of the following is a key characteristic of a sole proprietorship?

<p>The owner bears all the costs and profits of the business (D)</p> Signup and view all the answers

What is the primary reason why sole proprietorships are commonly used for small businesses?

<p>They are relatively easy and inexpensive to establish (D)</p> Signup and view all the answers

What is the minimum nominal value of each share in a limited liability company in Germany?

<p>1 euro (D)</p> Signup and view all the answers

What is the designation used for a company in Germany that has a share capital below the minimum requirement?

<p>UG (haftungsbeschränkt) (C)</p> Signup and view all the answers

What is the relationship between a sole proprietorship and its owner's personal income?

<p>The sole proprietorship's income is incorporated into the owner's personal income for tax purposes (C)</p> Signup and view all the answers

What are the potential liabilities for the owners of a limited liability company in Germany if the company becomes insolvent?

<p>They are liable only up to the amount of their investment in the company. (D)</p> Signup and view all the answers

What is the main difference between a 'GmbH' and a 'UG' in German law?

<p>A 'GmbH' has a higher minimum share capital requirement than a 'UG'. (A)</p> Signup and view all the answers

What does the term 'haftungsbeschränkt' mean in the context of German company law?

<p>Limited liability (D)</p> Signup and view all the answers

If a limited liability company in Germany has assets of 120,000 euros and debts of 400,000 euros after liquidation, what happens to the remaining debts?

<p>The creditors are forced to absorb the loss. (B)</p> Signup and view all the answers

What is the main purpose of the legal form 'Unternehmergesellschaft (haftungsbeschränkt)' or 'UG' in German law?

<p>To enable entrepreneurs with limited capital to start a company with limited liability. (D)</p> Signup and view all the answers

What are the main aspects of establishing and operating a company in Germany that are discussed in the text?

<p>The legal framework for establishing a limited liability company, labor and tax laws, commercial, antitrust and IP laws, and access to capital markets and relevant banking and finance laws. (A)</p> Signup and view all the answers

What does the text mention about the possibility of transferring credit for a completed internship abroad?

<p>It can be credited towards a practical experience in a business administration (BWL) program or the business economics (VWL) program. (C)</p> Signup and view all the answers

What specific conditions must be met in order for credit to be transferred from a completed internship abroad?

<p>The internship must have been completed in a field that is relevant to the student's degree program. (C)</p> Signup and view all the answers

What is the significance of the phrase 'Berechnung der Gesamtnote der Bachelorprüfung' that is mentioned in the text?

<p>It refers to the calculation of the overall grade for the bachelor's degree examination. (D)</p> Signup and view all the answers

What does the text mention about the possibility of granting ECTS credits for partial modules?

<p>ECTS credits can be granted for partial modules if the student demonstrates a justified interest and applies for it. (A)</p> Signup and view all the answers

What are the admission requirements for attending module examinations?

<p>Students must have a general university entrance qualification and must have been admitted to the program. (D)</p> Signup and view all the answers

Which modules are mentioned as part of the Bachelor's degree program in the text?

<p>Business Administration (BWL), Business Economics (VWL) and Accounting. (C)</p> Signup and view all the answers

How are 'Financing and Investment' and 'Special Business Administration I' assessed?

<p>They are assessed by final examinations. (C)</p> Signup and view all the answers

Flashcards

Germany's Economy

Germany is the world's fourth largest economy and a leading economic driver in Europe.

Engineering Focus

Germany's industry specializes in engineering, particularly automobiles, machinery, metals, pharmaceuticals, and chemicals.

Logistical Infrastructure

Germany has an excellent logistical infrastructure that supports business operations.

Highly Skilled Workforce

Germany is known for its educated and skilled workforce, which is vital for various industries.

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Stability of Economy

Germany maintains a stable economy, reducing risks for businesses.

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Course Title

Doing Business in Germany is the course focused on the legal and taxation system in Germany.

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Course Assessment

The course includes a final exam lasting 60 minutes, assessing students' knowledge.

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Workload

The estimated workload for this course is 75 hours, suggesting time commitment required.

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Limited Liability Company (LLC)

A business structure that limits owners' personal liability for debts.

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Labor Framework in Germany

Laws regulating employee rights, working conditions, and employment contracts.

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Tax Framework in Germany

The system of taxes applicable to businesses and individuals in Germany.

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German Commercial Law

Laws governing commercial transactions and business practices.

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Antitrust Laws in Germany

Regulations aimed at preventing monopolistic practices and promoting competition.

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Intellectual Property (IP) Laws

Laws that protect inventions, designs, and brands from unauthorized use.

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Access to Capital Markets

The ability for companies to raise funds through public or private investments.

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Banking and Finance Laws

Regulations governing financial institutions and transactions in Germany.

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Withdrawal Deadline

A student can withdraw from an exam module until the third business day before the exam date.

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Module Exam Admission Criteria

Admission to a module exam can only be denied if the specified requirements are not met.

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Grading of Module Exam

A passing grade from a module exam is recorded and is essential for calculating the overall bachelor's degree grade.

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Knowledge Application

Students should demonstrate their ability to independently apply acquired skills and knowledge.

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Bachelor's Exam Foundation

The results from individual module exams are the foundation for the overall bachelor’s degree assessment.

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Types of Long-term Finance

Sources of finance classified as debt or equity.

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Debt Financing

Borrowing money to be repaid with interest; risk of bankruptcy if unpaid.

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Equity Financing

Funding from owners that has no repayment obligation; residual claim.

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Sole Proprietorship

Unincorporated business owned by one individual, personally liable for debts.

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Advantages of Sole Proprietorships

Easily formed, few regulations, all profits kept by the owner.

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Taxation in Sole Proprietorships

Income taxed as personal income; no separate business tax.

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Sole Trader (UK)

Term used in the UK for a sole proprietorship.

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Liability in Sole Proprietorship

Owner is personally liable for all business debts and obligations.

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Minimum Share Capital

The least amount of capital required to form a limited liability company, set at €25,000.

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Nominal Value of Shares

The stated value of each share that must be a full euro amount.

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Insolvency

A state where a company cannot meet its financial obligations.

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Entrepreneurial Company (UG)

A type of limited liability company with a lower minimum share capital.

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Liability of Shareholders

The extent to which shareholders are responsible for company debts.

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Debt Liquidation

The process of selling assets to pay off debts.

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Section 5 GmbHG

Regulation outlining share capital requirements for GmbHs in Germany.

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Management Board

A group of individuals responsible for managing company operations and led by a chairman.

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Supervisory Board

A body responsible for appointing/removing the management board and overseeing its activities, not involved in daily operations.

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General Meeting

A meeting where shareholders appoint supervisory board members and make decisions on significant matters.

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Shareholders

Individuals or entities that own shares in a company and have the right to vote at general meetings.

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Societas Europaea (SE)

A European legal entity allowing companies to operate across member states under a single set of rules.

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Cross-Border Operations

Business activities that span across various countries within the European Economic Area.

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Approval of Transactions

The supervisory board’s role in approving significant transactions and changes in management.

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Three Quarters Majority

A voting requirement that demands at least 75% of votes to pass certain decisions in the general meeting.

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Study Notes

English 1 Course Information

  • Course title: English – Doing Business in Germany
  • Professor: Prof. Dr. Prof. h.c. Bernhard Schellberg
  • Faculty: Business Law
  • University: University of Applied Sciences Schmalkalden/Germany
  • ECTS Credits: 2.5
  • Level: Bachelor
  • Course Description: Covers legal and taxation aspects of doing business in Germany, including company establishment, labor, tax, commercial law, antitrust and intellectual property laws, and access to capital markets.
  • Workload: 75 hours
  • Course Assessment: Final Exam (60 minutes)
  • Course start date: October 15th, 2024
  • Lecture Time: Tuesday, 14:15 – 15:45
  • Lecture Hall: D0301
  • Additional information links: Provided study links

Chapter 1: Introduction

  • Germany's economic importance and focus areas are discussed.
  • Key aspects of doing business in Germany are outlined and explained.
  • The course emphasizes using appropriate legal terminology and improving relevant language skills in business law discussions and negotiations.

Chapter 2: Germany - An Overview

  • Baker & McKenzie law firm's publication on "Doing Business in Germany" is used as a resource.
  • Overview of Germany's political system.
  • Students will discuss and provide updates on recent changes in German legislation and business environments.
  • Students should be familiar with civil and common law systems.
  • Importance of Germany in terms of Gross Domestic Product (GDP) is highlighted.
  • BRICS countries growing importance, the states included and the role of foreign policies are emphasized.
  • Overview of types of long-term financing (debt vs. equity).
  • Explanations of the firm's promise to repay debt with interest.
  • Debtholders' recourse if the promise is broken.
  • Equity and residual claims on the firm.
  • Sole Proprietorship -Characteristics and formation -Advantages -Disadvantages: Unlimited personal liability -Limitations: Difficult to obtain growth capital and its limited life

Chapter 4: Limited Liability Incorporated Entities

  • Limited Liability Company (GmbH) and Stock Corporation (AG) characteristics -Legal form -Provisions for Limited Liability -Structure of the company (e.g. share capital requirement)
  • Explanation of the different types of shares (e.g., bearer shares vs. registered shares)
  • Important aspects of the formation process.
  • Mandatory three-tier system in AG -Management board -Supervisory board -General Meeting

Chapter 5: Societas Europaea (SE) and Branch

  • SE is a "European" entity, governed by European community law, complemented by national laws, and offers a unified business framework for companies with operations in multiple member states of the European Economic Area.
  • Branch establishment for foreign companies in Germany: operating a branch either as directly or through a subsidiary.

Study Regulations

  • Admission to focus module exams and thesis writing will be only after completion of mandatory modules in the first two semesters as per the study regulations.
  • Examination regulation details are given.

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